Stablecoins traded in the U.S. state of New York should be fully backed by certain assets, with these assets segregated from the issuers’ operational funds and attested to by an auditor regularly, according to new guidance issued by the state’s banking and finance regulator.
The New York Department of Financial Services (NYDFS), which oversees regulated crypto companies in the state, published its first stablecoin-specific guidance Wednesday, listing a series of requirements that any issuer operating in the state must abide by.
The idea behind the guidance is to formalize both consumer protection and institutional soundness, NYDFS Superintendent Adrienne Harris told CoinDesk in an interview.
“As we think about stablecoins and this guidance, and this is something we have been working on before the events of last month, really our goal is to accomplish those things for the stablecoin market, the safety and soundness of institutions, stability of the marketplace and consumer protection,” she said.
For stablecoins, this includes ensuring liquidity for redemptions, she said.
According to NYDFS’s guidance, stablecoins, the value of which is intended to be pegged to the U.S. dollar or other assets, must be backed by a reserve composed of U.S. Treasury bills with no more than three months to maturity, U.S. Treasury notes, some types of U.S. Treasury bonds or reverse repurchase agreements that are collateralized by Treasury bills.
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